Eurobonds are on the way, whatever Mrs Merkel says

There will be no unified euro bond market, says Angela Merkel. This is, of course, the same Angela Merkel who denied that the first Greek bailout would happen, that the second Greek bailout would happen and that the Portuguese bailout would happen; the same Angela Merkel, indeed, who assured us that "we have a treaty under which there is no possibility to bail out states in difficulty".

A market trader who relied on the German Chancellor's word would, I suggest, be less prosperous than one who relied on, say, this blog, which forecast all those events while they were being officially denied. Eurobonds are not inevitable; but I still think they are the EU's likeliest next move. For many Brussels decision-makers, they are not an emergency response to the crisis, but a long-held goal.

In today's Financial Times – the Eurocrats' paper of choice – Wolfgang Münchau argues that, by the time eurobonds are agreed, they will be too late to save the euro. He may well be right. But the fact that his column appeared at all is significant. When European leaders want to canvass support for an idea, they generally plant it in the FT. A campaign is plainly underway across the palaces and chancelleries of Europe.

UPDATE: Deutsche Bank suggests a wayin which eurozone bonds could be introduced while remaining within the letter of the Treaties (hat-tip, Hugo Philion).